A look at the quantities in column 3 confirms this

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Unformatted text preview: y of watches produced in 2004 must have been greater than the quantity of watches produced in 2003. A look at the quantities in column 3 confirms this assumption. Also, because the real GDP figure for 2005 ($37,100) is lower than that for 2004 ($40,000), the quantity of watches produced in 2005 must have been lower than the quantity of watches produced in 2005. Again, column 3 confirms this lower production. Finally, in computing real GDP for 2003, 2004, and 2005 we multiplied the quantity of watches produced in each year times the price of watches in 1987, the base year. Thus, another way to define real GDP is GDP in base-year prices or, if 1987 is the base year, for example, GDP in 1987 prices. 11/17/05 6:06 PM Page 299 Is There Real GDP Growth in Your Future? ?????????????????? S uppose you heard on the radio that per capita real GDP grew by 2.3 percent last year in the United States. Does this percentage matter to you? Life goes on pretty much the same way, right? You didn’t get a pay raise at your part-t...
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